The recently released India’s Trillion Dollar Digital Opportunity, a report by the Ministry of Electronics and Information Technology (MeitY) in collaboration with McKinsey & Company has been making waves.
The report highlights India’s digital growth story and shows how India can unlock up to USD 1 trillion of economic growth by 2025 from its rapidly proliferating digital economy. A narrowing digital divide, a focused and inclusive digital model, a rapidly increasing smartphone user base, and proliferation of the Internet are some of the factors creating more opportunity and value in India today. This report shows that:
- India is the second largest mobile-subscription base in the world with nearly 1.2 billion mobile subscriptions
- It has the second largest internet subscriber base with 560 million internet subscriptions
- There are 294 million social media users in the country
- There are 176.8 million eCommerce users
- There are 292,000 functional government-approved Common Services Centers around the country which deliver assisted online services
- The annual digital payment transactions stand at 24.3 billion
- Smartphone ownership has quadrupled from 5.5 smartphones per 100 people in 2013 to 26.2 phones per hundred in 2018. India has added 280 million smartphone users
These statistics reveal India’s capacity for digital consumption, something that is higher than that even of China and the United States. Concentrated government initiatives such as creating the world’s largest digital identify program (AADHAAR), a robust digital infrastructure with creation of broadband highways, universal mobile connectivity for all, a state-of-the-art National Knowledge Network (NKN), and focused impetus on technologies such as cloud computing, Big Data, AI and IoT are some of the contributing factors fueling this growth.
There has also been tremendous private-sector innovation and investment to transform India into a digitally-empowered country and a knowledge economy. The rise of the digital economy also creates immense opportunities and impacts almost all industries such as healthcare, retail, financial services, hospitality, travel etc.
Healthcare
The report shows that life expectancy in India has increased by 10 years over the past three decades. The government has also taken measures such as Janani Suraksha Yojana to reduce infant and maternal mortality rates. India’s fight against polio was a success with WHO declaring the country polio-free in 2014.
However, despite these and many such improvements, India ranks 131 among 188 countries globally on the latest UN’s Human Development Index. The country also has to focus on providing effective care for infectious and noncommunicable conditions such as heart disease, diabetes, cancer, obesity, etc.
India’s mission is now to provide the highest level of health and wellbeing for citizens and ensure quality healthcare access for all. India also needs to establish public health goals which include reducing incidents of communicable and non-communicable diseases, and infant and maternal mortality rates. What India aims for is an almost Uber and Airbnb like experience when it comes to healthcare. And technology is going to be the enabler of this new era of healthcare.
Electronic Health Record systems EHR’s are setting the foundation of quality healthcare across the globe. India is no different. A properly implemented, comprehensive EHR system can ingest data from multiple sources such as hospitals, diagnostic centers, healthcare centers, labs etc. and provide a detailed summary of the patient’s health.
Such systems not only provide a 360 degree-view of an individual medical history but also provide deep insights into public health and epidemiology. With clear insights, healthcare stakeholders can improve health outcomes, take proactive steps to implement public health policies, and deliver better care.
Analytics is clearly going to be the gamechanger in healthcare. Analytics applied to EHRs can unleash the wave of preventive medicine by identifying at-risk individuals to make targeted and timely interventions.
Analytics will also help public health programs, identify, mitigate and manage epidemics and pandemics such as dengue and cholera more proactively. They can also be applied for better supply chain management to ensure that primary health centers are always adequately stocked with medical supplies to treat and manage an outbreak.
With timely analysis of data in the form of lab tests, medical images, genetic profiles, liquid biopsies, electrocardiograms, etc. healthcare professionals can make better, timely and more accurate decisions faster. Clinical decision support leveraging data improves health outcomes, reduces readmission rates and drives better patient engagement.
Logistics
According to this report:
- e-commerce in India could add $15 billion to $20 billion in 2025
- Presently India has 176.8 million eCommerce users
- India currently spends 13 to 14 percent of its GDP on logistics
- Accelerated implementation of digitization could reduce inventory costs from 5% to 3% by 2025 creating an economic value of $12 billion to $15 billion
The phenomenal growth of eCommerce has raised customer expectations. They now expect higher service levels and reduced delivery timelines. The supply chain thus has to become more accurate and high-performing for eCommerce companies to remain competitive. The digital supply chain leverages advanced analytics not only to improve quality and performance but also improve operational efficiencies, optimise resource allocation and consumption and accurately forecast demand cycles.
By applying data innovation to logistics, India also has the opportunity to reduce its spend on logistics and become more competitive in global markets.
Financial Services
India has witnessed large scale financial inclusion over the past few years with a massive rollout of bank accounts reaching 300 million underserved people.
- The digital payments ecosystem is fast maturing with 24.3 billion digital transactions in December 2018
- 26% or retail payments in 2017 were done electronically and there is a constant and ongoing push to move towards a cashless economy
Analytics can play a vital role in enhancing this digital payment and financial services ecosystem by enabling better data-driven decision making.
Advanced analytics can help financial institutions assess creditworthiness, enable more accurate credit scoring and provide deeper customer-related insights. The use of data in this sector also has scope in risk management and ensuring better cyber-security resilience against hackers, cyber-attacks, malware, and fraud.
The rise of the data economy has also changed the compliance and regulatory landscape. Financial services companies stand a better chance to navigate this complex minefield leveraging data analytics to enable easier and more comprehensive compliance systems.
IT and Software
The IT-BPM sector accounts for approximately 40 percent of India’s service exports. The revenues from the IT-BPM industry are expected to range from $280 billion to $350 billion in 2025 translating to an added economic value of $250 billion in 2025.
A shift from legacy technologies towards digital technologies, automation, cloud, big data analytics, AI etc. are going to drive value for companies adopting them. Data is going to become central to the decision-making process and augment digital transformation initiatives.
As IT and software shift towards building advanced digital applications, IT and BPM companies have to pivot their business models leveraging data to develop new digital offerings. By honing their data analytics capabilities, organisations can build a 360-degree view of the customer, reinvent the organisational model, provide greater service assurance, improve marketing and sales outcomes by capably recognising opportunities to upsell and cross-sell to existing customers. Data can also be leveraged to reduce customer churn, drive product adoption and reduce customer churn.
Quite obviously, capturing the value of this growing digital economy will demand concentrated collaboration between business entities and the government. As technology creates new opportunities, we must also establish a robust framework to secure this digital future. Building robust data privacy and security features are therefore essential to create a future-fit framework and uphold consumer trust in this digital ecosystem that will be led by data.
